Di Yi Cai Jing·2025-08-04 12:05Core Viewpoint - The global innovative drug industry continues to face significant uncertainties in policy and funding, making it essential for CXO companies to ensure demand growth and stabilize market expectations. The Chinese innovative drug industry is showing signs of recovery, leading to improved demand expectations for the CXO sector, exemplified by WuXi AppTec's strong mid-year performance [1][17]. Financial Performance - WuXi AppTec reported a total operating revenue of 20.8 billion yuan for the first half of 2025, a year-on-year increase of 20.6%. The net profit attributable to the parent company reached 8.56 billion yuan, up 101.9% year-on-year [3][17]. - The company achieved a gross profit margin of 44.45% and a non-IFRS net profit margin of 30.4% in the first half of 2025, marking a significant recovery in profitability [6][12]. Business Model and Growth Drivers - WuXi AppTec's unique CRDMO business model has been a key factor in maintaining stable performance amid market fluctuations. The model allows for a seamless transition from research to production, smoothing revenue volatility [7][8]. - The company has seen a notable increase in commercial and late-stage clinical projects, with commercial orders becoming a larger portion of its revenue, enhancing its financial stability [8][12]. Market Dynamics - The demand from overseas clients has shown significant growth, with revenue from U.S. clients increasing by 38.4% year-on-year, while European client revenue grew by 9.2% [13]. - Despite the recovery in demand, the U.S. market for innovative drugs still faces challenges, including limited support for the industry and a series of layoffs in the biotech sector [13][14]. Future Outlook - WuXi AppTec has raised its full-year revenue guidance for 2025 from 41.5-43 billion yuan to 42.5-43.5 billion yuan, reflecting confidence in its order execution and business model [17]. - The company plans to continue its strategy of share buybacks and cash dividends to stabilize market expectations, announcing its first interim dividend of 3.5 yuan per share [18].